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A New Year’s resolution: Don’t sue in 2012
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The Toronto Star
Only lawyers win lawsuits. So make the following New Year’s resolution: No matter what happens in a real estate deal or any other part of your business or personal life you’ll try and find answers without suing.
I worked in Bell Canada’s legal department some years ago and we ran an ad campaign around a Yak, that shaggy cow-like animal found in Central Asia. The campaign was called Yak all you want. Rogers ran an ad one day called ‘Yak attack’ — with a dead upside-down Yak. The advertising folks wanted me to sue Rogers. I said: “You want to spend $50,000 in legal fees to give Rogers $100,000 worth of free publicity? Even if they lose the case, they’ll be winners.”
In the end we didn’t sue, but it illustrates the point.
People often tell me about the grief a tenant who does not pay rent is causing them. The situation inevitably spins out of control and results in a long process that leads to a landlord and tenant hearing. Think of it in terms of a traffic ticket. First you had to go to traffic court to waste half a day to plead not guilty. Then you were upset for a year, waiting for your case came to trial.
The last week before the trial you prayed the officer might not show up for court so you would get off. All of this for maybe $100 and potentially higher insurance rates. Now take that stress and multiply it by a thousand and you can begin to imagine what a lawsuit feels like.
When people tell me they want to sue, they often say it’s not the money, it’s about the principle. Forget it. It’s always the money. You never come out ahead by going to court. Besides the lost time, stress and aggravation, even if you win, there is never any guarantee that you are going to collect any money. Since it normally takes so long to get to court, if the scoundrels are avoiding paying you, they will figure out how to hide their money even if you win so you won’t be able to locate it.
I have spoken to many people who have been through a trial and they have told me that even if I guaranteed to them in advance that they would win, they would never go through another trial if they could avoid it.
So, in a tenant situation, rather than rush off to court, consider a discussion with the tenant about their situation. They may want to pay the rent but because of a change in circumstance, can no longer afford it. Rather than hound them, why not offer to help them move out and forgive the rent owing? Your tenant should be agreeable to not having their credit ruined in exchange for leaving more quickly on their own and you can then find a new tenant. Write off the loss as a business expense and save your health.
Use mediators to assist you if you cannot work this out by yourself. If you are both mature and want to solve the problem, then find an objective third party whom you both trust and just agree to live with whatever they decide. You will have your chance to make your case and then it will be finished, one way or another.
Remember, the worst settlement is still better than the best lawsuit, because just being in a lawsuit means you have already lost.
Don’t sue anyone next year and if you are sued, figure out a way to settle. Trust me, you will have a healthier, more prosperous 2012.
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